Banking M&A Digest #38 (22.8.2019)

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My weekly notes on banking and financial services – 

by Aivars Jurcans

Done! And Done

Norwegian Air Shuttle has sold its 17.5% stake in Norwegian Finans Holding, the owner of Bank Norwegian, to Cidron Xingu Limited for USD 246.7 million.

Source: Reuters

Intact Financial Corp, a Canadian property and casualty insurer, has agreed to acquire The Guarantee Co of North America, a provider of specialty insurance, surety and personal insurance, and Frank Cowan Co, a managing general agent which acts as an intermediary between an insurance company and clients, from Princeton Holdings for USD 750.6 million in cash. 

Source: Reuters

Deals On the Table

Goldman Sachs is said to be seeking regulatory approval to increase its stake in Goldman Sachs Gao Hua Securities from 33% to 51%. At present the majority interest in the JV belongs to Beijing Gao Hua Securities, owned by a veteran Chinese banker Fang Fenglei and Legend Holdings.

Source: Bloomberg, Reuters, FT

Cigna, a US health insurer, is said to be exploring a sale of its group benefits insurance business. The potential transaction value could be as much as USD 6 billion. 

Source: Reuters

Tilney, a UK asset manager (founded in 1881) owned by Permira (a buyout group) is said to be in talks over a potential merger with Smith & Williamson, another asset manager (founded in 1836). A combined entity would become one of the largest wealth managers in the UK with GPB 45 billion in assets under management.

Source: FT, Bloomberg

Thailand’s central bank is said to be considering selling as much as 54.4% of the total capital in Bangkok Commercial Asset Management (the country’s biggest distressed assets manager) in an initial public offering. Central bank currently owns “almost the entire company”.

Source: Bloomberg

Vietnamese government is said to be considering selling as much as 35% of shares in Vietnam Bank for Agriculture and Rural Development by the end of 2020.

Source: Bloomberg

Metrics To Watch

OneSavings Bank’s, a UK specialist lender, net interest margin dropped to 2.78% in H1 2019, from 3.01% a year ago. Charter Court, another specialist lender, reported a decrease from 3.08% to 3.04%.

Source: FT

Uncharted Territory

Berlin HYP, a German lender, has sold EUR 1 billion in mortgage-backed bonds with a yield of minus 0.59%, the most deeply negative yield on record. The company became the first non-state entity to sell a euro-denominated bond with a sub-zero yield.

Source: FT

Up-and-Comers

Root Insurance, a Columbus, Ohio, based tech enabled seller of auto insurance through a mobile app, is said to be finalising a USD 350 million funding round that would value the company at USD 3.65 billion. Root Insurance earned USD 133.4 million in insurance premiums in H1 2019. 

Source: WSJ

On the Baltic Shores

The European Central Bank closed down PNB Banka, a Latvian lender with EUR 500 million in assets and EUR 472 million in customer deposits, because “the need for additional impairments of its assets led to a significant deterioration in its capital situation to the point that the bank’s assets were less than its liabilities”.

Source: FT

Exciting Numbers

According to the World Bank, about 1.7 billion people remain “unbanked”, meaning they do not have access to a financial institution or a mobile money provider.

Source: FT

A Thought Worth Noting

“Fintechs are pretty slim in their product offering. Right now, they’re surviving on user growth rather than being great businesses.”

Kim Fournais, CEO and co-founder, Saxo Bank

 

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Aivars Jurcans has more than 20 years of corporate finance and investment banking experience. His services are currently available through MURINUS ADVISERS.

Photo by Daria Shevtsova on Unsplash

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